Most internet gamblers are well aware that money transfers are an extremely important part of the wagering system. There are always security and trust issues associated with online money transfers. Billions of dollars are moved on the internet every day. To prevent fraud and theft banks and internet gambling operators have invested huge amounts of money on state of the art security systems that cannot be hacked. Traditionally real money exchanges take place using a conventional banking system. The services are not free and banks make money from every money transfers.
There are huge amounts of money going back and forth on the internet every second 24/7. For many the idea of using cash is seems obsolete. Just a few decades ago smartphones and the internet were nonexistent. Today people in industrialized countries are becoming more dependent on computer and smartphone technology. The banks have an economic interest in keeping things as they are because they make a lot of money processing online transactions. Today the concept of virtual currencies has bankers around the world worried.
A few governments have issued virtual currencies. Government issued virtual currencies must still use the traditional banking system. In 2006 the internet gambling industry suffered a severe blow after the US congress passed a law making it illegal for banks, credit card companies and other financial institutions to process any transactions related to gambling. At the time banks and credit card companies lost billions but were forced to comply with the new law.
The invention of bitcoins changed the way online transactions are processed. Since bitcoins are not issued by a government they are a perfect solution for internet gamblers in the US and other countries where online gambling is illegal. Bitcoins are traded like any other currency and current exchange rates are available online. Some are questioning the security of bitcoin Ewallets on mobile devices. A recent article published on the Genesis Block website said a security breach had been found on an Android device and some bitcoins were stolen. The article states “A few days ago a severe vulnerability in the Android implementation of the Java Secure Random number generator was discovered. The result of this vulnerability is that private keys used in transactions on Android devices can be determined. All bitcoins in addresses used on Android devices need to be immediately rotated to a new address.”